DOW JONES NEWSWIRES
General Electric Co. (GE) said Wednesday the Federal Deposit Insurance Corp. has approved an application allowing its GE Capital unit to exit the Temporary Liquidity Guarantee Program.
The move means GE Capital will no longer issue government-guaranteed short-term debt and will now be able to issue non-guaranteed long-term debt with maturities of 18 months to three years. The company has sold tens of billions of dollars in such guaranteed debt.
GE Treasurer Kathryn Cassidy said the move away from the liquidity-guarantee plan was a "positive step in returning the broader capital markets to normal functioning and is in line with GE Capital's 2009 and 2010 debt issuance and funding cost plans." She added it will allow the company to respond to "strong investor demand" for longer-term debt.
Cassidy also said GE Capital has issued about $12 billion in long-term debt outside the liquidity-guarantee program, including about $3 billion this week in a euro deal that saw strong demand.
Last year, GE - renowned for its consistently sturdy earnings - shocked Wall Street by missing expectations after troubles at GE Capital. The unit's woes over the past year have prompted the company in recent months to cut its dividend for the first time in 60 years and lose its coveted AAA debt rating.
Last week, GE reported second-quarter profit dropped 47% on continued struggles at the financial unit. Chairman and Chief Executive Jeff Immelt said at the time the GE Capital unit was still on track to be profitable for the full year.
GE's shares were recently up 1 cent at $11.48 in premarket trading.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353; kerry.benn@dowjones.com